The Dangers of Renting Your Property to a Charity for Subletting to Vulnerable Tenants

Not exactly the same but I was approached by a charity asking me to home ex-homeless people who were now ready to move into independent accommodation. I was assured that they had been through a rehabilitation process and that they were ready. I agreed to take on three tenants in a HMO.

Fast forward a year and the house had become what can only be described as a crack den with multiple people living there, up to 4 people in a room including minors. There was regular class-A drug use, violence and police and ambulances were regular visitors to the property. The other tenants lives were made a living hell.

Eventually got them out but it wasn't easy as the authorities tried to do everything they could to stop them being evicted. Cost me around £30k (which I have had to borrow) to undo the damage they did to the property.

yes rented a property to the council via an agent to a women homeless with children - was not informed the partner had moved in and drug abuse and he
had a history of violence going back years. trashed the place - friends all living there - by passed the gas and electricity supplies. policed there all the time

council not bothered place them with a private landlord and not their housing - took 2 years to finally get rid
never rent to councils you think you are protected you are not

2 decades or so ago I let to a London Housing Association who insisted on using their agreement/contract. It looked OK with property having regular inspections and would be handed back in a similar condition.

Sloshing magnolia paint on the walls at tenancy end to cover horrendous mould was tried by them. But their workmen forgot to paint behind the radiators!

The sublets used the lounge carpeted floor to put their primus cooking stoves on and burnt large circular patches, the cooker was pristine as never used in 3 years! Mould everywhere as windows never opened etc etc.

Then it cost me over £10k per flat ( x 2) to rectify and involved knocking back to the brickwork, new rendering and plastering to get rid of the mould, new floors as either burnt or mould ridden and new windows.

Think very very carefully if renting to companies or housing associations using your property for the vulnerable, refugees or asylum seekers even if your heart is in the right place.

We let property to a company not a charity which house young people transitioning from care into semi independent living with a view to moving on and living independently.
I would advice landlords to go into this type of arrangement with their eyes open as it can be a positive experience but there are also some pitfalls.
We had the issue with the provider wanting to use an AST, as an experienced investor I refused and use the appropriate agreement, interestingly they regularly use AST's with most landlords.
We would never let an HMO to house these tenants as would cause problems if they lived together, It is bad enough when they are handed the keys to their own flat/house, it quite often becomes a a free for all party flat.
Maintenance can also be an issue as these types of tenant are generally short term and don't look after the property.

the fundamental issue here is there is no guidance on what one of these rent to rent contracts SHOULD look like. What should a LL be looking for, what terms are key?
One of the councils I deal with sub out the provision for temp accomodation to 6 companies who then look for private LL's to fulfil their contract.
The council need one beds right up to 5 & 6 bed properties.
(Side note - There is a wide variety of temp accomodation but in this sense is purely accommodation for families currently on the council waiting list. No individuals, no vulnerable tenants. They all have legal status just living in currently unsuitable temp accom. eg family living in a one bed flat when they really need a three bed property for example. The rise in HMO's means that a lot of family sized accommodation is badly needed and LL's are not offering up direct AST's with benefit tenants themselves (obvious reasons))
Of these 6 companies all have differing contracts, different terms etc yet all are tasked to provide the same to the LA. So the LL is on a back foot here - what due diligence can you do exactly? Ok the company may have been awarded a contract with the LA so you hope that in some way they have been vetted in the tendering process, but what does the LL need to do to protect themselves in this process exactly.
The tenant is on licence to the LA, the LA gives the contract to this company/Agent, and you have a contract with the company/Agent.
I think a lot more LL's WOULD use R2R (in this exact relationship) if there was more known about what it is you need to look for when presented with a contract.

I am aware there are a plethora of other types of agreements that come under the R2R umbrella. That again is where confusion comes.

Reply to the comment left by Judith Wordsworth at 24/06/2024 - 10:15
'asylum seekers'

A few interesting dots that might align.

1 Westminster is introducing a 'voluntary' conscription to the armed services
2 The Biden Washington government wants to extend the extant but generally ignored obligation to register as potential draftees from US citizens to ALL residents, the US southern border makes the Channel look like a concrete wall.
3 Westminster is intending to end housing 'refugees' in hotels and shift responsibility to councils
4 During WWII servicemen were often billeted with families
5 NATO countries are already engaged in contrary treaty actions in Ukraine

Quite by chance a video appeared yesterday in my glooptube feed suggesting that Councils were to be given powers (by whom) to force refugees into any home with a spare bedroom.

...might align, I certainly hope not but our government, all our governments, isn't serving our interests at all.

One for the plus side. We passed a 1 bed to Futures Homes in Amber Valley for 5 years. They put in an ex drug user who had been hospitalised for a considerable time and left with issues. Nice guy who mentally could not cope with work and struggled but was and is entirely clean. We got the place back and he was scared we would get rid of him. The Housing Association guaranteed they could remove him and redecorate and replace carpets etc. He had painted the place with a lot of dark and black. Nice guy with a companion. We said no problem that he could stay. We judged him on the garden which is small but fab with what he had done. That was 8 years ago. He is still there. Great tenant and muted pastel colours now. Insists on doing most repairs. Insurance insists on 3 monthly checks. It's always great. My advice is to research how reliable the charity is. Futures provided full, appropriate and genuine support. Others don't - they can be a nightmare. They let the tenant down as well as the owner. And DO check the paperwork is right. They often are not. I suspect it is deliberate to allow them get outs when everything goes to hell. Don't let them say social services will do it all. They won't and can't as it comes to the charity's responsibility. If the paperwork is wrongly done it is you the owner who has to carry the can. Research the charity minutely.

Renting to a charity to house tenants not of your choosing is shooting your self in both feet. The local authority needs to house people who it would not put in council housing. You may be left with an undesirable tenant who it is near impossible to evict.

I run a small not for profit company that leases properties in Sheffield from private landlords, for use in providing supported housing for people experiencing homelessness. We have been doing this since 2004, so have 20 years experience.

We have made mistakes along the way, but have learnt from those mistakes and improved our service offering to both the owner landlords, and also to our residents. We usually offer 6 year lease agreements at around the LHA rate for that size property, but we also provide full maintenance and repairs (non-structural), and we pay for some improvements (e.g. fire doors, fire alarm systems, electrical upgrades, etc), and we pay for the EPC, EICR, and gas safety inspections. Most of the landlords we lease from are happy to renew their lease with us time and time again.

We do see a lot of Rent2Rent operators making BIG mistakes in their set up and paperwork, which can then put the owner landlord at risk of legal consequences. However, this is much more dominant with private "for profit" R2R operators, rather than those who are genuine "not for profit" operators, as the source and security of funding is very different, and this is crucial to the level of risk.

As with all potential business dealings, it is important that each party does their own due diligence on the other party, and satisfies themselves that they fully understand the legal agreement that they are about to enter into.

Each party should ask all the awkward questions of each other, e.g. what happens if the residents don't pay, who is responsible if the drains get blocked, what happens if residents trash the house, who pays for repairs if the slates fall off the roof, what if residents refuse to leave at the end of the lease term, etc, etc.
- If you are not satisfied with the answers provided (always get the answers in writing) then walk away from the deal.
- If you are satisfied with the answers (and the due diligence on the organisation), then still tread carefully and get all documents checked by a professional legal adviser.